Emma Pinchbeck

If you don't do that, you'll end up subsidising it somewhere else.

We make the electricity price cheap and then people are going to want to adopt electric technologies.

And happily, that will get us a long way down the road to net zero.

Yeah, it occurs to me that we should explain that as well as the wholesale price in the market, there are these fixed contracts and a lot of energy infrastructure is receiving a fixed price contract for a service one way or the other.

But in particular, all of the new renewables projects are receiving this contract for difference.

But some of the older ones are on a...

more direct form of subsidy called the renewables obligation.

A lot of that tails off in the 2030s.

There is no question that you're going to start to see changes in the market from the 2030s.

What the Climate Change Committee recommended and what others have suggested is you do something about those legacy costs early to get the cheap price early.

And the government moved some of them, some of that legacy price off, but not all of it.

Other organisations, including my old one, have recommended things like moving VAT off the bill or looking at some of the other costs and moving those.

The Climate Change Committee said the renewables obligation, the feed-in tariff and some of those support schemes.

So it's good they have done that thought process and moved some.

The golden thread for the Climate Change Committee, by the way, as much as we care about low bills in the environment we're in, is that we want the electricity-to-gas price to be at a ratio of 3 to 1, which is a level of geekery.

What's the magic of 3 to 1?

When you look at successful electrification in other economies, particularly for heat, places like Poland or Italy or Scandinavia, the magic ratio for when...

a investment in a heat pump rather than a boiler or a electric vehicle rather than a solar-combustion vehicle, what it really starts to pay off is around the 3 to 1 ratio.

Preferably, you know, 2 to 1, but 3 to 1.

And so that decision to advise to move the levies in some way is because that chunk on the electricity price is enough to get you to that 3 to 1 ratio, depending on what the wholesale gas price is doing in a typical year.